What Does Homeowners Insurance Cover?November 1, 2017
Buying a home comes with many financial obligations that go beyond just the purchase price. When you finance your home, the principal and interest are just the beginning. In addition to padding your budget for home maintenance and repair costs that are sure to arise, you will also need to account for property taxes and homeowners insurance. Designed to protect you and your home from disasters big and small, homeowners insurance not only offers you peace of mind, it is also required by lenders. Yet many homeowners do not have a full grasp of what exactly is and is not covered. We will outline the basics of what you can expect and discuss some of the more surprising things that you may not know.
When natural (or non-natural) disasters strike: what is covered and what is not
We cannot predict what curveballs life will throw at us, especially when it comes to Mother Nature. A typical homeowners insurance policy will provide coverage for lightning strikes, windstorms, hail and fire. Earthquakes and floods would need separate coverage. Coverage for natural disasters extends to both the dwelling and your personal belongings. This means that the structure of your home as well as other structures such as garages and decks would generally be covered.
It is not just the structure of the home that needs to be considered in emergencies; your belongings and valuables inside the home will need to be replaced in the event of a disaster. Personal property protection is included in most policies, and many offer additional coverage that you can purchase if you feel that the value of your items exceeds that which is provided by the standard policy.
Fires and storms are not the only catastrophes that can wreak havoc on your life. If someone breaks into your home, the theft would be covered under your homeowners insurance policy. Experiencing an invasion of privacy like that can be emotionally traumatic, especially if the thieves take something that has value beyond just monetary. While you cannot replace the meaning attached with certain items, at least you will have comfort knowing that your furniture and electronics will be covered, should someone invade your life in such a way.
Surprising things your insurance might cover
There are a few nice surprises when it comes to what homeowners insurance covers. Has an extended power outage caused all those groceries you just put in the fridge to go bad? No worries—your policy’s spoiled food coverage should provide coverage for up to $500 of food gone bad.
Bankrate calls homeowners insurance a “general liability policy” that covers clients in any location, not just at home, so some miscellaneous accidents could be covered. It is wise to check your coverage whenever you have an incident that involves your property.
If your home becomes uninhabitable after a disaster, many policies will cover food and lodging expenses while the home is being repaired; however, be aware of limitations on this.
Don’t count on it: some possible exceptions to your coverage
Beware: there are certain things that many policies either will not cover or will impose limitations on coverage. Two common backyard items that may not be covered or might have certain stipulations are pool and trampoline accidents. Though both can add a lot of fun to backyards, they are considered safety risks, so you may need to consider adding additional coverage to compensate for any liability that could occur. You can protect yourself by adding an umbrella policy that would offer you much more in liability protection.
Some home disasters stink more than others—and this is especially true in the case of mold or sewage backup. Neither is typically covered in standard homeowners insurance policies, leaving you with an undesirable mess on your hands. To prevent mold from becoming an issue, make sure you take care of any flooding or leak as soon as possible.
How valuable are your valuables? Though homeowners insurance policies include personal property protection, there are limitations on the amount of coverage for jewelry. In addition, if large amounts of cash are stolen or damaged, this can be hard to prove to insurance companies, so be mindful of this.
It is best to choose an insurance provider who can offer you superior protection for your home and guide you through the best choice for you. At Perry Homes, our dedicated team is here to provide answers to all your questions throughout the process, so reach out to us!